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Employment Unchanged — Market to Drift Lower

As I have been telling you, the major story this week for markets has been the jobs reports. The ADP report out Wednesday didn’t look too bad. But the Challenger job cuts report out Thursday was a little less optimistic, showing cuts had rebounded, some.

So this morning, we get right to the Department of Labor numbers just out:

“Total nonfarm payroll employment increased by 160,000 in April, and the unemployment

rate was unchanged at 5.0 percent, the U.S. Bureau of Labor Statistics reported

today. Job gains occurred in professional and business services, health care, and

financial activities. Job losses continued in mining.

Household Survey Data

In April, the unemployment rate held at 5.0 percent, and the number of unemployed

persons was little changed at 7.9 million. Both measures have shown little

movement since August. (See table A-1.)

Among the major worker groups, the unemployment rate for Hispanics increased to

6.1 percent in April, while the rates for adult men (4.6 percent), adult women

The number of persons employed part time for economic reasons (also referred to

as involuntary part-time workers) was about unchanged in April at 6.0 million

and has shown little movement since November. These individuals, who would have

preferred full-time employment, were working part time because their hours had

been cut back or because they were unable to find a full-time job.

(See table A-8.)

In April, 1.7 million persons were marginally attached to the labor force, down

by 400,000 from a year earlier. (The data are not seasonally adjusted.) These

individuals were not in the labor force, wanted and were available for work,

and had looked for a job sometime in the prior 12 months. They were not counted

as unemployed because they had not searched for work in the 4 weeks preceding

the survey. (See table A-16.)

Among the marginally attached, there were 568,000 discouraged workers in April,

down by 188,000 from a year earlier. (The data are not seasonally adjusted.)

Discouraged workers are persons not currently looking for work because they

believe no jobs are available for them. The remaining 1.1 million persons

marginally attached to the labor force in April had not searched for work for

reasons such as school attendance or family responsibilities.

One report does not a trend make. However, with numbers as good as they have been the past several months (whether you believe them or not), it’s hard to see any additional upward momentum developing.

In the meantime, as we noted for subscribers on the Peoplenomics side of things, start watching for the automation, robotics, and drone stories to pick up tempo, now. How those work out – and how many humans get “left in the loop” will largely determine how the next 10-20 years work out.

In long wave economic terms, the 2009 housing bust sure looks to me like the market bust in 1921. There were about four – maybe six, depending on where you count from – during the first 22-years of the 20th Century. Then they got a long break: From the market bust in 1921 until the top in early September of 1929. Then the crappola hit the fan.

Then, like now, the Fed was under some pressure to raise rates. It’s useful to remember that there were several small hikes in 1927-1928.

Making things worse, the 1929-1931 Fed was asleep at the switch when came time to lower rates.

One has only to recall that in May of 2000, the Fed was still raising rates – and arguaby, the Tech Wreck could have been a lot softer if the Fed had been more anticipatory.

I lay out a few of the data points, because we are less than a month from the next meeting of the European Union central banksters.

European trading today is down about 8-10ths of one percent. If the U.S. markets follow suit, a decline today of around 100 points could be in the cards. And there is enough inter-market arbitrage to at least mention that as a possibility.

Looking at the Global Index components we track, the Hang Seng in Asia is getting quite close to the 20-thousand level. Sinking below that would be very bad.

In Europe, the German DAX which had been one of the real high-fliers, is more than 200 points under the 10,000 level, and with a solid decline through psychological support, it flips and becomes overhead resistance on the way back up.

For what it’s worth the old adage “Sell in May and Go Away” may have come early this year. Still, a summer rally could be in the cards into early September (presidential optimism and so on) but we will have to wait and see how the testimony under oath goes.

Something to keep a close eye on: You will notice that some of the (remarkably, still pro-Clinton) media are being very careful to plant disclaimer like (and I will paraphrase) “investigators have failed to find any wrongdoing…”

If you haven’t figured it out yet, the reason Bernie Sanders hasn’t dropped out of the race yet is simple: He could win the party nomination by default if the Clinton email scandal blows up between now and convention time. Or, he could be the acknowledged back-up plan if it blows up after the presumptive coronation of Her.

As long as we are on politics, I meant to mention that it struck me as slightly odd that Ted Cruz packed it in just 24-hours after the photo of Cruz’s dad passing out leaflets with one Lee Harvey Oswald surfaced in a public way.

Not saying there is anything to hide, but seems to me there are a lot of questions around that which could be answered, if for no other reason, than as important background to those of us who vote in Texas. If it was a fake, who did it?

I’d offer to go myself, but the Gulfstream is in the shop and the eyes aren’t good enough to forge documents this week.

– – – – –

In this weekend’s Peoplenomics.com report, we will go over some of the ways to handicap the presidential election. No, we don’t really care who wins (like it matters, terribly). Instead, we look at it as a kind of early-warning system for how to set your investment bets for the coming four years…and that is a really useful thing to do.

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Employment Unchanged — Market to Drift Lower — 10 Comments

Phew.. so much going on..In my opinion we are already in the spiral of doom.. my theory was when that new spending bill (that very few contested I might ad on both sides of the isles) started to be implemented and the flood gates of greed take over for the one percent that an effect similar to what happened during the carter administration when congress did him in the dark without any lubricant to take the blame over their actions with the millionaire relief act of 1978 LOL LOL..IN My thoughts I seen a similarity and thought after the spending bill that was basically shoved down everyone’s throats as a quick fix (obviously without anyone but the people that wrote the stupid thing reading it) and because of it the millionaires and the middle class will be used as lubricant for the wheels of greed for the one percents profits as everyone else is shoved beneath the bus of progress.. that there would be a false flag stock market event taking place to give the very few the opportunity to get corporations at bargain basement prices.. I am not sure.. would it be in June or late may that it would take place but only time will tell if I am right or not.
the rest of the figures I think are pretty much fabricated fluff as an overheard conversation from senator say.. tell them anything give them a 1 2 3 speach they are all dumb as sheep.. what is funny is .. He is right on the money on that…. kind of like telling your kids how to manage their paychecks.. easy on paper..real life is much different.. Now the big question is who will the puppet masters allow to be the vice president.
Will this battle of the titans that flows right under the current of world affairs right now affect any of it or maybe stave the disaster for another date..

Hi, George.
It should be interesting if Hillary gets deposed… Someone who is absolutely incapable of telling the truth if it came up and bit her on the ass. Not that she doesn’t know the truth- she’s just incapable of telling the truth. Or answering a question directly. Oh to be a fly on the wall during the deposition. The torrent of weasel words should be incredible to behold!

…As I’ve been telling you, don’t discount the possibility of Bumbling Joe or Lizzie being the eventual Democrat nominee.

The Obama Machine will squeeze Hillary purple, until she becomes their whore, or [they will] loose DOJ on her if she refuses (talk about an incentive to win!) Bernie, off-camera, is a stooped-over, doddering old man who doesn’t look like he’ll live another 4 months, let alone 4½ years to fill out a term in (arguably) the world’s toughest job.

Either Biden or Warren will jump into the nomination at a moment’s notice, but will do so only if asked (begged), and only if they can make a “Mighty Mouse” entrance to “save the day.”

We forget (and many of us never know) that the Democrat Party and Republican Party are private corporations. They play hardball and play for the long-haul. They set their own rules, which they can amend or break at any time, and they’ve suckered well over 100mln of us into swearing allegiance to one or the other, to the exclusion of all others.

One of “Ray’s Rules,” first penned nearly 40 years ago, is: 37% of American voters are Democrats, 34% of American voters are Republicans. The remaining 29% decide ALL elections.

That 29% is Trump’s for the taking ‘cuz they don’t like the Democrat choices — unless…

US. Bureau of Labor Statistics, Civilian Labor Force Participation Rate [CIVPART], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/CIVPART, May 6, 2016.
I don’t care what the official unemployment rate is. The only number that really matters in this discussion is the labor participation rate shown in the link above. As you can see, the 6 month up tick that just paused(currently just below feb 16 rate) has only brought us to the level we where at in early 1978! When you take that with home ownership rates at 63.5%, lowest since the 4th quarter of 1985, and velocity of money at near record lows, a rosy economic outlook seems unrealistic. All stats from stlouisfed.org.

You know the rates are all “estimated” by doing interviews with select groups and reaching out to various state agencies. It is not some counter that is incremented nationally when someone is hired, decremented when fired, etc.

You will see : -316k employed people this month. We didn’t add 160k jobs, the net jobs was -316k. Those numbers are digested and that can lead to further market trade next week. It’s not a hard number to report on – however, they do not report on it. Rates and Percents don’t matter. It is the delta of those working that I care most about.

Year over year, we are up 2.5 Million workers for April 2015-April 2016. not too bad.
From the BLS link above: 148,509k to 151,004k

I sometimes wonder whether we pay too much interest in rates? In MY ‘economic model’ interest rates would have remained fixed thru all of history because goods and services with their exchanges make up the economy! I also realize that a certain group wants to get rich by speculation w/o work; Just having fun–see where it will get us?! Sometimes I can’t believe how we trap ourselves again and again.

Challenger job cuts of 17,000 included INTC (Intel) with 12,000. It’s hard to compute the # of coffee shop and burger flipper jobs needed to be added to replace 12,000 Intel employees. One person at my church works at Intel and is keeping an eye on what is to come. He’s older and a prime target for “The Bobs” (reference to Office Space). https://vimeo.com/54739845